Hat tip to JT for sending this in from C&RB:

Shifts In San Diego’s Private Club Market Highlighted

sluzMore “forward-thinking, contemporary” management approaches that involve “running [clubs] with a little more business sense” reflect movement away from “your father’s country club,” notes a special report that includes insights from GMs of The Farms GC, La Jolla CC and The Santaluz Club.

While there are indications that business is beginning to turn for the better at many of the 20 private clubs in San Diego County, a report in the San Diego Union-Tribune noted, it has become clear that even the most established and stable clubs in the region are “remaking themselves by necessity to adapt to a complicated lifestyle” and a buyer’s market.

In a year that saw Escondido Country Club shutter its doors after 46 years and 51-year-old StoneRidge Country Club in Poway, Calif. get foreclosed upon and purchased off the auction block, other clubs in the county are still running on a razor-thin financial edge, the Union-Tribune reported, and those on the best footing are still taking note of how they need to change to succeed in the future.

“These are not your father’s or grandfather’s clubs anymore,” Jim MacDonough, General Manager of The Santaluz Club in Carmel Valley, Calif., told the Union-Tribune. “They’re more forward-thinking, more contemporary. Clubs are being more sensitive to current trends and market conditions to stay ahead of the curve, instead of maintaining staunch traditional values.”

Those concessions include jeans in the dining room and cell phones on the grounds, and have also led to significant changes in the cost structures of San Diego’s saturated private club market, the Union-Tribune noted.

When The Santaluz Club opened in 2002, it was noted, it cost $140,000 to join, but the initiation fee is now $50,000, which represents an increase from $43,000 last year. The Farms Golf Club in Rancho Santa Fe once fetched more than $100,000 but now is offering memberships for $20,000, with a one-year “test drive” of paying only monthly dues, the Union-Tribune reported. And The Bridges in Rancho Santa Fe, Calif., which the Union-Tribune termed “The Louvre of the North County private clubs,” opened with an initiation fee of $350,000, but is now asking $125,000.

Even La Jolla Country Club, the envy of every club with a waiting list of several years to get in at more than $100,000, now modestly trades one outgoing member for one incoming, to keep its full complement of members, the Union-Tribune reported.

“There’s sensitivity to running the club with a little more business sense,” La Jolla CC General Manager Mike Mooney told the Union-Tribune. “We scrutinize things carefully. It used to be if the members wanted it, we’d do it. Now we look at what makes the most sense.”

Bruce Bennetts, General Manager of The Farms GC, told the Union-Tribune that while some of his members once belonged to four clubs, they have cut that to one in the last five years.

“We’re out of the recession, really, but we’ve still got the oversaturation,” Bennetts said. “We’ve just got too many golf clubs. We need more of them to close, and then everybody would be healthier. But I don’t see that happening either.”

Bennetts and The Farms are in the heart of what the Union-Tribune called “a private club smorgasbord” in Rancho Santa Fe, with nine courses within about a 20-minute drive — a density matched in California only in the Palm Springs area. The Union-Tribune highlighted a membership initiative at The Farms that has offered a yearlong preview with only monthly dues ($966) that include cart fees and no food-and-beverage minimum, as an example of “creative” approaches prompted by the financial downturn. Bennetts told the Union-Tribune that 100 new members joined through the program in 2010 and 90 percent of them eventually paid the $20,000 initiation fee and became permanent members.

At StoneRidge CC, to attempt to overcome the negative publicity of the auction sale, the Union-Tribune reported, initation fees have been waived until the end of 2013, according to General Manager Ron Gorski, and monthly dues have been set at $595 for an entire family.

At The Santaluz Club, The Union-Tribune reported, there were rumors of trouble as the club stuck with a six-figure initiation fee and its developer, DMB, stayed on longer than intended. But in the eventual transition to management by the homeowners, the initiation fee was sliced to $40,000, and McDonough said the club has added 25 members this year to get to a total of 340 golf members, 60 shy of the cap.

Steve Cowell, a member at Santaluz since 2006, told the Union-Tribune that when he has heard a few members grumble about the loss of equity in their initiation fee, he has reminded them of the dire alternatives. Cowell, 64, a retired biotech CFO, said he does not compute a per-round cost based on the dues of $1,235 per month.

“My wife and I bought into a lifestyle,” he said. “I didn’t buy a membership at this club to make money.”

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